Legal Environment of Business and Online Commerce 7th Edition Cheeseman Test Bank

Legal Environment of Business and
Online Commerce 7th Edition

Cheeseman Test Bank
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Legal Environment of Business and Online Commerce 7th Edition Cheeseman Test Bank
The Legal Environment of Business and Online Commerce, 7e (Cheeseman)

Chapter 2 Ethics and Social Responsibility of Business
1) All laws are framed to meet the highest ethical standards.

Answer: FALSE
Diff: 1
Topic: Ethics and the Law
Skill: Legal Concepts
2) An ethically wrong state or condition can still be legal.

Answer: TRUE
Diff: 1
3) The False Claims Act permits private parties to sue the government on behalf of a corporation.
Answer: FALSE
Diff: 1
Topic: Business Ethics
4) The False Claims Act grants the private party a share in the monetary recovery made in a
whistleblower case.
Answer: TRUE
Diff: 1
5) Under ethical fundamentalism, a person looks to an outside source for ethical rules or
commands.
Answer: TRUE
Diff: 1
6) The main criticism for ethical fundamentalism is that it does not allow people to decide what
is right or wrong for themselves.
Answer: TRUE
Diff: 1
7) Utilitarianism postulates doing the greatest good for the greatest number of people.
Answer: FALSE
Diff: 1
1
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8) Kantian ethics is also known as duty ethics.
Answer: TRUE
Diff: 1
9) Kant believed that people owe moral duties that are based on universal rules.
Answer: TRUE
Diff: 1
10) Kantian ethics is based on the premise that people can use reasoning to reach ethical
decisions.
Answer: TRUE
Diff: 1
11) In Kantian ethics, the principle of inconsistency postulates treating all ethical cases
differently.
Answer: FALSE
Diff: 1
12) According to Kantian ethics, one would be obligated to abide by a contract even if that
contract turns out to be detrimental to the obligated party.
Answer: TRUE
Diff: 1
13) Kantian ethics distinguishes between the morality one uses to judge others and the morality
one uses on oneself.
Answer: FALSE
Diff: 1
14) The social contract theory is derived from Rawls's social justice theory.
Answer: FALSE
Diff: 1
2
15) According to Rawls's social justice theory, a person who is in a state of "veil of ignorance" is
best fit to select the fairest possible ethical principles.
Answer: TRUE
Diff: 1
16) According to Rawls's social justice theory, moral duties are based on an implied social
contract.
Answer: TRUE
Diff: 1
17) Ethical relativism holds that moral standards ought to be based on an individual's feelings of
what is right or wrong.
Answer: TRUE
Diff: 1
18) According to ethical relativism, an action that is usually thought to be unethical would not be
considered unethical if the perpetrator thought it was ethical.
Answer: TRUE
Diff: 1
19) The traditional view of social responsibility of business emphasized maximizing profits for
employees rather than shareholders.
Answer: FALSE
Diff: 1
Topic: Social Responsibility of Business
20) The theory of moral minimum emphasizes correcting social injuries caused by a business.
Answer: TRUE
Diff: 1
21) The theory of moral minimum stresses on making profit even while causing harm to others.
Answer: FALSE
Diff: 1
3
22) There are no specific governmental laws endorsing a moral minimum of social responsibility
on corporations.
Answer: FALSE
Diff: 1
23) Section 406 of the Sarbanes-Oxley Act requires a public company to disclose whether it has
adopted a code of ethics for senior financial officers.
Answer: TRUE
Diff: 1
24) The theory of stakeholder interest compels a corporation to consider the effects of its actions
specifically on shareholders.
Answer: FALSE
Diff: 1
25) The theory of corporate citizenship contends that corporations owe a duty to promote the
same social goals as individual members of society.
Answer: TRUE
Diff: 1
26) ________ is a set of moral principles or values that governs the conduct of an individual or a
group.
A) Rationality
B) Evolution
C) Ethics
D) Reason
Answer: C
Diff: 1
4
27) Which of the following cases describes an agreement of ethics and laws?
A) A company outsourcing its jobs to a foreign country.
B) A person being penalized for bribing a judge to rule a case in the person's favor.
C) A company not spending more money to keep its emission rates below the legal standard.
D) A person hiring an illegal alien worker whose family is in destitute.
Answer: B
Diff: 2
28) ________ is an ethical theory where a person adheres to rules or commands that are from an
outside source, like a book or a central figure.
A) Ethical fundamentalism
B) Utilitarianism
C) Ethical relativism
D) Rawls's social justice theory
Answer: A
Diff: 1
29) ________ Act is a federal statute that permits private parties to sue companies for fraud on
behalf of the government and share in any monetary recovery.
A) Business Norms
B) Sarbanes-Oxley
C) Glass-Steagall
D) False Claims
Answer: D
Diff: 1
30) Jules Renton, a financial accountant at Valkyrie Aviations, deals with the accounts Valkyrie
has with the government. Valkyrie Aviations are in contract with the government to deliver a
new bomber plane called Spearhead. While reviewing the Spearhead account, Renton noticed
that Valkyrie has been falsely billing the government for Spearhead's production. If Renton
chooses to be a whistleblower and expose the scam to the government, what Congress enacted
statute must he invoke?
A) Business Norms Act
B) Sarbanes-Oxley Act
C) Glass-Steagall Act
D) False Claims Act
Answer: B
Diff: 2
Skill: Factual Application
5
31) A government or political party that strictly derives its ethics and laws based on a specific
religious book is an example of ________.
A) utilitarianism
B) ethical fundamentalism
C) ethical relativism
D) Kantian ethics
Answer: B
Diff: 1
32) Which of the following statements describes the moral theory of utilitarianism?
A) People must choose the action or follow the rule that provides the greatest good to society.
B) People must follow actions that are in accordance with a specific moral rule or principle from
a religious text.
C) People must choose to follow actions of a virtuous person.
D) People must follow actions based on moral duties imparted from one's community.
Answer: A
Diff: 1
33) Which of the following is an apparent disadvantage of utilitarianism?

A) It does not allow people to have subjective notions of right and wrong.
B) It is based on moral duties derived from universal rules.
C) It puts too much emphasis on one book or theory.
D) It treats morality as if it were an impersonal mathematical calculation.
Answer: D
Diff: 2
34) Which of the following moral theories lays emphasis on morality based on one's moral
duties?
A) moral relativism
B) utilitarianism
C) Kantian ethics
D) ethical fundamentalism
Answer: C
Diff: 1
6
35) Which of the following moral theories would closely follow the categorical imperative "Do
unto others as you would have them do unto you?"
A) Kantian ethics
B) moral relativism
C) utilitarianism
Answer: A
Diff: 1
36) ________ is a moral theory which says that people owe moral duties that are based on
universal rules.
A) Rawls's social justice theory
B) Kantian ethics
C) Utilitarianism
D) Moral relativism
Answer: B
Diff: 1
37) Reversibility is a principle of Kantian ethics which says that ________.

A) a person must be allowed to reverse his moral judgment to better suit his needs
B) a person must treat all moral circumstances as one
C) a person must be allowed to selectively choose moral judgments based on the circumstances
D) a person must abide by the rule he or she uses to judge the morality of someone else's conduct
Answer: D
Diff: 2
38) Consistency is one of the two important principles of ________ upon which its universal
laws are based.
A) utilitarianism
B) Kantian ethics
C) Rawls's social justice theory
D) moral relativism
Answer: B
Diff: 1
7
39) Which of the following is a perceived disadvantage of Kantian ethics?
A) It treats morality as if it were an impersonal mathematical calculation.
B) It does not allow people to have subjective notions of right and wrong.
C) It is based on universal rules that have no common consensus.
D) It distinguishes between the morality one uses to judge others and the morality one uses on
oneself.
Answer: C
Diff: 2
40) Portman, who runs a computer hardware store, had signed a contract with Stewie Inc. to
deliver 125 computer monitors. He was to deliver it by the 5th of August, but by the 3rd of
August, Portman could not arrange for the monitors, as his usual supplier was not available.
Portman then decided to go to another supplier who had a higher selling price rather than cancel
the contract with Stewie Inc. as he believed it was his duty to do so. What of the following moral
theories matches Portman's behavior?
A) Kantian ethics
B) utilitarianism
D) moral relativism
Answer: A
Diff: 1
41) How are ethical rules established in Kantian ethics?

A) by a set of universal rules that are based on consistency and reversibility
B) by following principles that have been derived from holy books
C) by an individual's feelings on what is right and wrong
D) by choosing the alternative that's best for society as a whole
Answer: A
Diff: 2
42) ________ is a moral theory which asserts that fairness is the essence of justice.
A) utilitarianism
B) Kantian ethics
D) moral relativism
Answer: D
Diff: 1
8
43) Which of the following theories of morality is Rawls's Social Justice Theory fundamentally
derived from?
A) the theory of utilitarianism
B) the theory of ethical fundamentalism
C) the social contract theory
D) the theory of moral relativism
Answer: C
Diff: 1
44) Which of the following is a perceived disadvantage of Rawls's social justice theory?
A) It allows for those in advantageous positions to suppress people in least advantageous
positions.
B) It doesn't consider the fact that people would not want to maximize benefits for the least
advantaged persons.
C) It only allocates people in advantageous positions to set up rules on morality.
D) It postulates that there are no universal ethical rules to guide a person's conduct.
Answer: B
Diff: 2
45) Which of the following moral theories matches the dictum "I will keep the rules if everyone
else does?"
A) perspectivism
B) social contract
C) moral relativism
D) utilitarianism
Answer: B
Diff: 1
46) How are ethical rules established in Rawls's social justice theory?
A) by a set of universal rules based on consistency and reversibility
B) from an original position of a veil of ignorance
C) by the ruling class or people in advantageous positions
D) by following what's best for the society as a whole
Answer: B
Diff: 2
9
47) ________ is a moral theory which holds that individuals must decide what is ethical based on
their own feelings about what is right and wrong.
A) Ethical relativism
B) Kantian ethics
C) Utilitarianism
Answer: A
Diff: 1
48) Which of the following moral theories will help an anthropologist study ancient societies
with an impartial and unprejudiced mindset, especially when it relates to ethics and customs
followed by ancient societies to that being followed in present societies?
A) Rawls's social justice theory
B) utilitarianism
C) Kantian ethics
D) ethical relativism
Answer: D
Diff: 2
49) According to ethical relativism, ________.

A) ethics rely on duties based around universal rules which one is morally bound to follow
B) each person is presumed to have entered into a social contract with all others in society to
obey moral rules
C) there are no universal ethical rules to guide a person's conduct
D) people must choose an action or follow a rule that provides the greatest good to society
Answer: C
Diff: 1
50) What is "maximizing profits" as a social responsibility theory in business?

A) The theory that a corporation must consider the effects its actions have on persons other than
its shareholders.
B) The theory that a corporation's duty is to make a profit while avoiding causing harm to others.
C) The theory that a corporation owes a duty to take actions that increases profits for
shareholders.
D) The theory that a business has a responsibility solely to its stakeholders that other than
shareholders.
Answer: C
Diff: 1
10
51) A social responsibility theory of business which says that a corporation's duty is to make a
profit while avoiding causing harm to others is referred to as ________.
A) stakeholder interest
B) corporate citizenship
C) maximizing profits
D) moral minimum
Answer: D
Diff: 1
52) The ________ Act enacted by Congress in 2002, requires public companies to adopt codes of
ethics, and establishes criminal penalties for companies that partake in violations.
A) Glass-Steagall
B) Sarbanes-Oxley
C) False Claims
D) Business Norms
Answer: B
Diff: 1
Steve Templeton, the CEO of Rolland Motor Company, is contemplating the shutdown of a plant
in Kantron. The plant has been unprofitable for some time now, and there is increasing pressure
from shareholders to shut it down so as to balance the loss being incurred by the shareholders.
But closing the plant would be a blow to the employees as they will lose their jobs, and the local
suppliers will lose a major buyer. There is also fear that the sudden closing of the plant will have
an adverse effect on the community of Kantron, as the plant is one of the main sources of
employment for the locals. Steve Templeton considered all these factors before making a
decision on the fate of the plant.
53) If Steve Templeton, after wagering all the factors, finds that the loss to the employees and
the community is far greater than the one incurred by the shareholders, and decides to keep the
plant open in Kantron. Which of the following moral theory matches Steve Templeton's
approach in keeping the plant open?
A) Kantian ethics
B) Rawls's social justice theory
C) ethical fundamentalism
D) utilitarianism
Answer: D
Diff: 2
11
54) If Steve Templeton decides to not close the plant in Kantron, what business social
responsibility will Steve Templeton be achieving?
A) moral minimum
D) stakeholder interest
Answer: D
Diff: 2
55) If Steve Templeton decides to close the plant in Kantron, what important business social
responsibility will Steve Templeton accomplish?
A) moral minimum
Answer: C
Diff: 2
56) Sinbad Cola, a soft drink manufacturer, recently opened a plant in Buron. The wastages from
the plant were dumped in the Buron Sea, situated a mile away from the plant. Dumping of wastes
in the sea resulted in water pollution, which negatively affected the Buron fishing business, and
also resulted in groundwater contamination. Sinbad Cola compensated by bringing
contamination levels down with additional filters, and paying damages to the local fisheries.
Which theory of business social responsibility did Sinbad Cola meet when they compensated for
their harmful wastage disposal methods?
A) moral minimum
B) stakeholder interest
C) corporate citizenship
D) maximizing profits
Answer: A
Diff: 2
12
57) ULab Inc., a biotechnology firm, recently had a fire in one of their offices which resulted in
the office building being gutted. The employees were not trained for a fire drill, and the 10-
storey building had no fire escape route which resulted in many employees being hospitalized for
physical injuries, burns and toxic smoke inhalation. What important social responsibility theory
was ULab negligent of by not training their employees in case of a fire and not installing a fire
exit?
A) corporate citizenship
B) moral minimum
C) stakeholder interest
D) maximizing profits
Answer: B
Diff: 2
58) ________ is a social responsibility theory of business which says that a corporation must
consider the effects its actions have on persons other than its shareholders.
A) Corporate citizenship
B) Maximizing profits
C) Moral minimum
D) Stakeholder interest
Answer: D
Diff: 1
59) What is "corporate citizenship" as a social responsibility theory in business?

A) Businesses are responsible to even helping solve social problems that it did not cause.
B) Businesses owe a duty to take actions that increase profits for shareholders.
C) Businesses have a responsibility solely to its stakeholders, and should strive to maximize their
well-being.
D) Businesses are obliged to consider the effects its actions have on persons other than its
shareholders.
Answer: A
Diff: 1
13
60) Conch Corporation, a global oil and gas company, has plans to open a subsidized
postsecondary vocational school in the town of Cristen, where one of their offices is situated.
The plan was put to vote and approved despite some objection from shareholders. The school is
being opened in collaboration of the local government, and the objective is to help the youth of
that neighborhood, especially dropouts, learn a vocational skill. What social responsibility theory
describes Conch Corporation's move to open the school?
A) moral minimum
B) maximizing profits
C) corporate citizenship
Answer: C
Diff: 2
61) Give an account of the relationship between ethics and law.

Answer: Ethics and the law are intertwined. Although much of the law is based on ethical
standards, not all ethical standards have been enacted as law. The law establishes a minimum
degree of conduct expected by persons and businesses in society. Ethics demands more.
Sometimes the rule of law and the rule of ethics demand the same response by a person
confronted with a problem. However, in some situations, the law may permit an act that is
ethically wrong. Another situation occurs where the law demands certain conduct but a person's
ethical standards are contrary.
Diff: 1
62) Explain the two principles used to derive the universal rules of Kantian ethics?
Answer: The universal rules of Kantian ethics are based on two important principles:
(1) Consistency–that is, all cases are treated alike, with no exceptions–and
(2) Reversibility–that is, the actor must abide by the rule he or she uses to judge the morality of
someone else's conduct. Thus, if you are going to make an Exception for yourself, that exception
becomes a universal rule that applies to all others.
Diff: 1
63) What is ethical relativism?

Answer: Ethical relativism holds that individuals must decide what is ethical based on their own
feelings about what is right and wrong. Under this moral theory, if a person meets his or her own
moral standard in making a decision, no one can criticize him or her for it. Thus, there are no
universal ethical rules to guide a person's conduct. This theory has been criticized because action
that is usually thought to be unethical would not be unethical if the perpetrator thought it was in
fact ethical. Few philosophers advocate ethical relativism as an acceptable moral theory.
Diff: 1
14
64) Give an account the social responsibility of businesses and list out its four main theories.
Answer: Businesses do not operate in a vacuum. Decisions made by businesses have far
reaching effects on society. In the past, many business decisions were based solely on a cost—
benefit analysis and how they affected the bottom line. Such decisions, however, may cause
negative externalities for others. Social responsibility requires corporations and businesses to act
with awareness of the consequences and impact that their decisions will have on others. Thus,
corporations and businesses are considered to owe some degree of responsibility for their
actions. Four theories of the social responsibility of business are: maximize profits, moral
minimum, stakeholder interest, and corporate citizenship.
Diff: 2
65) What is theory of moral minimum in social responsibility for businesses?

Answer: Some proponents of corporate social responsibility argue that a corporation's duty is to
make a profit while avoiding causing harm to others. This theory of social responsibility is called
the moral minimum. Under this theory, as long as business avoids or corrects the social injury it
causes, it has met its duty of social responsibility. The legislative and judicial branches of
government have established laws that enforce the moral minimum of social responsibility on
corporations.
Diff: 1
66) Under the moral theory of ________, a person looks to an outside source for ethical rules or
commands.
Answer: ethical fundamentalism
Diff: 1
67) The ________ Statute is a federal statute that permits private parties to sue companies for
fraud on behalf of the government and share in any monetary recovery.
Answer: Whistleblower
Diff: 1
68) ________ is a moral theory with origins in the works of Jeremy Bentham and John Stuart.
Answer: Utilitarianism
Diff: 1
15
69) The moral theory that dictates people choose the action or follow the rule that provides the
greatest good to society is referred to as ________.
Answer: utilitarianism
Diff: 1
70) ________ is one of the two principles of Kantian ethics that states that the actor must abide
by the rule he or she uses to judge the morality of someone else's conduct.
Answer: Reversibility
Diff: 1
71) Kantian ethics is also referred to as ________ ethics.

Answer: duty
Diff: 1
72) According to Rawl's social justice theory, ________ is considered the essence of justice.
Answer: fairness
Diff: 1
73) Rawl's social justice theory is based on the ________ theory of morality proposed by John
Locke and Jean-Jacques Rousseau.
Answer: social contract
Diff: 1
74) Under the moral theory of ________, if a person meets his or her own moral standard in
making a decision, no one can criticize him or her for it.
Answer: ethical relativism
Diff: 1
75) The social responsibility theories of businesses attempt to infuse a code of ________ in
corporate behavior and its responsibilities.
Answer: ethics
Diff: 1
16
Legal Environment of Business and Online Commerce 7th Edition Cheeseman Test Bank
76) The ________ theory of social responsibility compels corporations to correct social injuries
it causes.
Answer: moral minimum
Diff: 1
77) The legislative and judicial branches of government have established laws that enforce the
________ of social responsibility on corporations.
Answer: moral minimum
Diff: 1
78) Section 406 of the ________ Act requires a public company to disclose whether it has
adopted a code of ethics for senior financial officers.
Answer: Sarbanes-Oxley
Diff: 1
79) The social responsibility theory of ________ tries to protect the interest of people, besides
shareholders, who are connected to a corporation.
Answer: stakeholder interest
Diff: 1
80) The social responsibility theory of ________ instructs corporations to solve social issues,
even ones that it may have not caused.
Answer: corporate citizenship
Diff: 1
17
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Legal Environment of Business and

Online Commerce 7th Edition

The Legal Environment of Business and Online Commerce, 7e (Cheeseman)

1) All laws are framed to meet the highest ethical standards.

2) An ethically wrong state or condition can still be legal.

Visit TestBankDeal.com to get complete for all chapters

33) Which of the following is an apparent disadvantage of utilitarianism?

37) Reversibility is a principle of Kantian ethics which says that ________.

41) How are ethical rules established in Kantian ethics?

49) According to ethical relativism, ________.

50) What is "maximizing profits" as a social responsibility theory in business?

59) What is "corporate citizenship" as a social responsibility theory in business?

61) Give an account of the relationship between ethics and law.

63) What is ethical relativism?

65) What is theory of moral minimum in social responsibility for businesses?

71) Kantian ethics is also referred to as ________ ethics.

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